Key Passages From Bernanke’s Jackson Hole Remarks

Federal Reserve Chairman Ben Bernanke’s speech at the Kansas City Federal Reserve Bank’s annual Jackson Hole, Wyo., conference ran more than 3,500 words. Here are some of the most important.

The recovery is lousy

“It is clear that the recovery from the crisis has been much less robust than we had hoped….Unfortunately, the recession, besides being extraordinarily severe as well as global in scope, was also unusual in being associated with both a very deep slump in the housing market and a historic financial crisis. These two features…have acted to slow the natural recovery process.”

Financial stress is a “significant drag”

“Financial stress has been and continues to be a significant drag on the recovery, both here and abroad. Bouts of sharp volatility and risk aversion in markets have recently re-emerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation…. It is difficult to judge by how much these developments have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth.”

What the Fed will do

“The Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September…. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.”

Long-run prospects for the U.S. are undiminished, if…

“I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if–and I stress if–our country takes the necessary steps to secure that outcome.”